PARIS – World markets dropped on Monday, extending heavy losses last week,as another setback for the U.S. economic recovery intensified fearsthat a global recession was in the making. The financial crisis in Europe continued unabated, with uncertaintyhanging over Spain’s banking sector and Cyprus looking increasinglylikely to need a European Union bailout. Investors were spooked by a U.S.
report showing a sharp slowdown inthe number of jobs created last month, adding to weak data fromother major economies like Europe and Asia. Unemployment in the 17 countries that use the euro currency stayedat a record-high 11 percent in April. And there were signs thatgrowth in China, which helped sustain the global economy throughthe 2008-2009 recession, is slowing significantly. China’smanufacturing weakened in May, according to surveys releasedFriday. “US jobs numbers were not the only weak reading as manufacturingoutput data in China and the US were also lower, and euro areaunemployment reached a record level,” Stan Shamu of IG Markets inMelbourne, said in an email.
“There aren’t many positives for risk assets at the moment,” hesaid. Adding to the evidence of a slowdown, new figures showed companiesplaced fewer orders to U.S. factories for the second straightmonth. The Commerce Department said Monday that orders for factorygoods fell 0.6 percent in April from March. In Europe, Germany’s DAX lost 1.2 percent to 5,978.23 thoughFrance’s CAC-40 managed to rise 0.1 percent to 2,954.49. Welding Turning Rolls
Markets inBritain were closed for a public holiday. Wall Street was opened lower, with the Dow Jones industrial averageshedding 0.3 percent to 12,079 while the S&P 500 falling 0.5percent to 1,271.50.40. In Spain, investors are waiting for what the government intends todo to boost the finances of some of its ailing banks. The worry isthat the government is already strapped for cash and might beoverwhelmed by the costs of rescuing its own banks. Plate Edge Milling Machine
It might haveto tap EU rescue funds, but it is reluctant to do so because suchaid would come with conditions on the government’s policies. As worries about Spain’s public finances have grown, investors haveshied away from lending it money, asking for higher interest rates.Those rates remained high on Monday, at 6.38 percent for 10-yearnotes, perilously close to the 7 percent that has already pushedGreece, Ireland and Portugal to seek financial aid. Meanwhile in Cyprus, the central bank governor said the eurozonemember is struggling to find 1.8 billion to inject in itssecond-largest lender, Cyprus Popular Bank, by a June 30 deadline.That means it is increasingly likely to have to accept EU rescuefunds. The chairman of Cyprus Popular Bank also suggested an EUloan now seemed more likely. Markets came under siege earlier during trading in Asia. China Welding Rotator
Japan’sNikkei 224 index dropped 1.7 percent to close at 8,295.63, itslowest finish since Nov. 28, 2011. The broader Topix index endedbelow the 700 mark for the first time since December 1983, KyodoNews Agency said. Hong Kong’s Hang Seng tumbled 2 percent to 18,185.59.
South Korea’sKospi shed 2.8 percent to 1,783.13. Benchmarks in Taiwan andIndonesia fell 3 percent and 4.3 percent, respectively. Mainland Chinese shares also lost ground, with the benchmarkShanghai Composite Index falling 2.7 percent to 2,308.55. Theindex’s drop of 64.89 points was the biggest this year.
Benchmark oil for July delivery was up 2 cents to $83.25 perbarrel, the lowest since October, in electronic trading on the NewYork Mercantile Exchange. The contract fell $3.30 to settle at$83.23 in New York on Friday. In currency trading, the euro rose to $1.2494 from $1.2424 lateFriday in New York. The dollar rose to 78.28 yen from 78.08 yen. ___ Pamela Sampson in Bangkok contributed to this report.